WADCO NEWS Volume 2 Plainville, Mass., February 25, 1921 Number 4 The Federal Income Tax It has oeciirred to us tliat at this particular time, while you and I are searching our minds for the solution of the tax problem, it might be well to review, in a general manner, the history and inception of. the income tax and discuss the different methods The purpose of this article is not what to do, nor how to do it, but rather to acquaint you with the evo- lution of the income tax laws. From our vai'icd experience with this uncertain problem we find that very seldom do the same technicalities arise in any two tax returns and to tell you how to prepare your particu- lar paper would take volumes of quo- tations from different decisions ren- dered on similar returns and peculiar- ities, and even then yon would prob- ably have to submit your case to a specialist to be analysed. Not only that, but these same specialists, men, of great experience and study on this subject very often vary in their con- ception of the applications of the dif- ferent clauses contained in the income- tax law. In face of this, we would hardly wish to take the responsibility of advising through this article. The Income Tax law may be traced back to the days of the Civil War, when on August 5, 1861, Congress pased an act levying a tax of 3 per cent, on all incomes in excess of $800 and in the following year reduced the exemption to .$600. Surtaxes were as- sessed at 5 per cent on all incomes over $10,000. This particular tax drew revenue from more than 275,- 000 individuals and netted the gov- ernment in excess of .$375,000,000, a small amount as compared with the enormous revenues collected today, and yet it sufficed as well as the col- lections of today. This law expired by limitation in 1871. In 1894, the next income tax law was passed by Congress, and in the following year the Supreme Court held that it was unconstitutional on the ground that it was a direct tax and as such, could only be levied if apportioned accordir.g to tlie popula- tion of the various states. In 1900 a Special Excise tax ap- plicable to corporations, at the rate of 1 per cent on entire net income over $5,000, received by corporations from all sources, was accepted by the Supreme Court as constitutional, and this tax remained in force until the Act of 1913 replaced it. In 1913, the sixteenth amendment to the Constitution was passed, pro- viding that Congress shall have the power to lay and collect taxes on in- come from whatever source derived, without apportionment among the several states and without regard to any census or enumeration. Immedi- ately after the ratification of this amendment. Congress began laying plans for an income tax law which was finally approved on October 3, 3913, and effective from Mar. 1, 1913. TJiis law was held to be constitutional by the Supreme Court in the famous ease of Brushaber vs. Union Pacific R. R., although many of its Treasury Department i-ulings have not been up- held by the Supreme Bench. The personal exemption allowable in this tax levy was .$3000 for a single l)erson and $1000 extra in the case of a married taxpayer. It was applied to the incomes at the rate of 1 per cent, on net income and was gradually in- creased to 6 per cent on the incomes of $500,000 and over. This tax yield- ed $71,000,000 the first year and was collectible at source. Collectible at source is a novel feature of the tax and was probably copied from the English method of collection which required that all persons or corpora- tions paying to individuals, incomes in form of v/ages, interest, rent, etc., of $3000 or $1000 were required to (led net 1 i3e;r cent, tax from this j^monnt payable and turn it over to the Collector of taxes. This method of collection caused so much com- plaint that it was soon abandoned be- cause those to whom the duty of col- lection fell disliked the duty of col- lecting in thi.s manner. In 1916 the law of 1913 the was re- pealed and a new income tax levied on the taxpayer. The principle of the tax and application was about Ibe same as that of 1913 fundament- f;llv, and its purpo.se was merely to raise the rate of taxation from 1 per ce"t to 2 per cent, on small incomes and from 1 per cent to 13 per cent, on incomes of great volume. It may 1 added that it also was revised to draw better distinctions and remodel those parts of the 1913 law that had caused so much friction. This particular tax yielded about $360,000,000 and yet such a sum was entirely inadequate to meet the tre- mendous expenses caused by our en- try in the war in 1917, consequently an act was passed in 1917 raising the tax rates to a level never before ap- proached in the history of taxation. The 1917 law which was passed on October 3, 1917 was merely a revision to the law of 1916 and by its radical changes in regard to exemptions being disallowed and lowered and wages in- creasing abnormally as money lost its old standard of exchange, we for the first time probably began to feel the effect of the income tax laws. A new normal tax rate of 2 per cent, was im]iosed on individuals and a rate of 4 per cent levied on corporations, while surtaxes ranged from 1 per cent, to 50 per cent, on larger incomes with reference to their derivation. As you all know, the 1917 law reduced personal exemption of the working- man and all others to $1000 for a sin- gle person and $2000 for a married taxpayer, with various other exemp- tions such as $200 for each dependent child and so on. The rates levied against the indi- vidual taxpayer in the law of 1918 were 6 per cent, applicable against in- come of .$4000 and under, with a nor- mal rate of 12 per cent, on income in excess of this amount. Corporations were taxed at the rate of 12 per cent, during this period and were further taxed on their excess profits. These rates, however, were of shoi't dnraticm and a revision followed, effective on January 1, 1919, wherein the individ- ual taxpayers were taxed on their in- come at the rate of 4 per cent, on the first $4000 and nnder, with a normal ]"!te of 8 per cent, on income in excess of this amount. Corporations were taxed at the rate of 10 per cent, and the excess profit tax was still en- forced. The law of 1918 is still in effect ^nnd many of you have felt its sting. As to the question of when it will be repealed, you know as much about it as we do, but our opinion is, that it v.'ill b(^ some time into the future be- Continued on Page 2, Col, 2. WADCO NEWS Wadco News Published Semi-Monthly by the Employees of Whitingf & Davis Company, Plainville, Mass. Publication Committee J. O. Gagfnon, Chairman W. M. Fuller Lee Higffins F. Gaddes O. Soderstrom II. B. Rowan Editor . . C. H. Peasley AssT. Editor, Catherine Kennedy COMMERCIAL PRESS- PR INTERS EDITORIALS Remember! March 1st — State returns must be filed. March 115 — Federal Returns must be filed. Answer to "Why Is This?" 1. That the "intelligent bunch of people" have to go some to get ahead of Henry's girls who are all in line before the bell rings and ready for the hundred yard dash, and have no respect for old age. 2. After rushing every day at piece work, it is a force of habit to keep on rushing. 3. It is a pleasure to "hear" Ar- thur Plante start his car — when it is. "frozen up." When we went to school we did not jump over desks nor children to see who could reach the door first. We stood and let one aisle go out. Now, I think we could do something of that sort here. We are only children grown up (at least we are supposed to be). Why not stand up and go in turn to ring out. It would not take any longer than it does to jump and walk over Ihe others to the clock first. The car won't go until the crowd gets there. Dear Editor: Will you kindly cor- rect the mistake in your last issue. The price of the "Purring Motor" is $750 not $600.— (Signed) H. Crow- ther. Continued on Page 1, Col. 1. fore we can do without taxation by this method, unless some new and more practical scheme of taxation can be introduced to replace it, such as the 1 per cent. Sales Turn-over Tax. This entire article deals with the Federal Income Tax and should not be confused with the State Tax which you have just made out and forward- ed to the State Collector to be there on or before March 1, 1921. The Federal Tax is due to be returned by the 15tli of March and the accounting department will be at your service in rendering these returns should you so desire, and any questions not with- in their understanding will be refer- red to the Company's tax adviser. MIDDLEBORO NEWS Evelyn has a diamond Which to her is very dear, And Gladys had a shower So their honeymoon is near. Lucy has a hope chest. Will she hope in vain? Beatrice thinks a man Is very hard to gain. If she should ask the matrons Who have been through the mill, I know they'd surely tell her "There's a way, if there's a will." Frances dressed in a hurry, The result was surely "a scream," When she arrived one stocking was brown. The other a beautiful green. Hazel, she has whispered That "wedding bells we'll hear" But who he is, we wonder For we never see him near. Mildred's boudoir cap is missing. Now we always see her curls. Corina she is wearing A brand new string of pearls. Dora, she is love sick, And completely "on the blink," Annie's so industrious She hasn 't time to think. Marie savs "she's disgusted And on fellows is not keen." Sophia wears a new ring With stone of brilliant green. We miss Eulalia singing, For she has gone away. Peginald is so bashful. Not a word he dares to sav. Arthur's girl has vanished, So he's feeling pretty blue. Norman he is quiet and Sticks to work like glue. The Boss's look of sadness I wish that we could cure, That "he'll never, never smile again" We are often very sure. But then he is a genius. And many things can make. For the bed he built for his baby boy I'm sure would "take the cake." Charlie does not here belong. His place is in burlesque. So the tantalizing things he does We have to take in jest. If Johnny's heart should get on fire We'll ring "a still" alarm And expect his Plainville comrades To rescue him from harm. And Billy often tells us That "he has a wife at home. And if he does not now behave She'll whack him on the dome." — Hattie Goodwin. Horace originated the idea of wear- ing coarse cotton gloves while about his duties in the shop. Later he may affect clogs and dress suit. Then we will elect him to our minstrel troupe. Ed. Ilerlin took a trip in "The Green Dragon" to New York a lit- tle while ago. We would be interest- ed to know if he enjoyed the blow- outs. What an awful thing it would be if a pickpocket were to touch William Stevensen of the Gold Department. Bill is in the habit of carrying eight pints every day. Only milk ! The Repair Department has been moved into the corner shop where they have practically a little factory of their own with coloring, soldering, polishing and assembly departments. Arthur Boehnkee is foreman of the new factorv. Hector Coutu might not be much of a fox hunter but he has proved his ability as a fox-trotter. We hear that when Horace Cheever got a strike the other night, he pitch- ed the next two balls down the gut- ter. Taking pity on them, Horace? WADCO NEWS SPORTS THE HIMKy-D/NKS TAKE A TRIMMI nG: . Frank Brown, Editor. Our artist has spread on paper some of the scenes he saw at the great bas- ket ball game which took place be- tween the so-called Hinkey Dinks who represented the office force and the Hambones who represented the brains of the Die Sinkers. Those who were not there missed the times of their lives. There were times when the lives of some of the players were hanging in the balance. The hall was prettily decorated with potted plants, mostly of the Sir Arthur va- riety, in fact the entrance of the hall was more than guarded by a serious looking plant not very pretty to look at, but much alive when stirred up. Bill Barton for Hinkeys secured some strangle holds on various occasions but when Fulton got a scissors hold on Bill he gave up and took the count willingly. Sturge tried and tried again to make his big D assert itself, but he found that the going wa.s a little rough in spots for him. Ray Fulton was the star, having caged ten baskets during the struggle. He is very modest in his make-up and for that reason he let up in his play as he did not want to make the college boys look like pikers. The teams were made up as fol- lows : Hambones — Coutu, Fulton, Boyles, Bunch, Toothill, Clampitt, Waldron. Total 37. Hinkey Dinks — Mayshaw, Evans, Eice, Moegan. Osterholm, Manchester, Barton. Total 8. f-X2,::0 THE OFFKSR FLPiNT-E r«f WAy B^/iToN leftThe: oRers/A/Q ROOM TVR Acriv/r/£s. CkN IT 8£ DONE A(lAlN — Archie Walden, who was the ref- eree, was surprised to see such talent as was shown in both teams, so look out, boys, he will be after some of you for his all-stars. Bowling still holds the athletes. The ladies of the Gold Mesh Depart- ment felt they had something they could put over on the Soldered Mesh girls, so they gave them a game with the following results: The Planning boys have been going along fine trimming all comers until the Polishers got after them, and they did the trick. Now they are not so proud as of vore. POLISHING ROOM Jilison, 93 97 91 271 Poor, 83 86 92 261 Lewouski, 79 97 90 266 Barrows, 83 83 106 272 Fawcette, 89 105 108 302 GOLD MESH 1372 Seen on the Side Lines McClemmens, Curran, St. John, Passmore, Gilbert, 60 67 53 170 41 38 66 146 57 51 62 no 37 67 34 138 47 66 31 145 PLANNING ROOM Crotty, 91 103 92 286 Spence, 96 70 78 244 Manchester, 96 84 82 262 Kenvon, 99 78 85 262 Manchester, 101 85 111 297 What was Officer Plant tring to do over in the corner? Put the handcuffs on Eva or were they only holding hands? 769 1351 SOLDERED MESH Three cheers for our old assistant manager Bill Kenney for jumping in and furnishing music while the regu- lar orchestra were on their way. Did you notice Horace, he of the poisoned hands? He still wears cotton gloves and delights dancine with the young- er set. Oh, you kid ! Whiting, 52 52 76 180 Larocque, 56 55 55 166 Cooke, 42 42 55 139 Oauvin, 48 36 44 128 Babineau, 65 62 73 200 This game was for a steak supper to be paid for by the losers. Fawcette is entitled to the first helping for his high string of 302. Gene and Ed showed some class for the planning boys, but could not polish off the lads from the shining department. 813 Miss Babineau was high for the Solderrd Mesh in the three-string totals apd Miss Whiting carried off Vr.o Imirrls for a single string of 76. And who said that our worthy edi- tor Vv^as a has been? Did you see ^im do the Wiggle Woggle and the Yippor Yapper in the true mediaeval style? WADCO NEWS V CAUGHT IN THE MESH Echoes from Export You ask wliore wo are? Well I'll tell you, Over the wide, wide ocean, And across the rock,y bar. And the answer comes from far You ask what we are doing? "Well, all through the live long day AVe are cutting tags and wrapping And putting bags away, To be shipped to the far off countries. To the people strange and qiieer: To the men and women and children To fill their hearts with cheer. And now we ask you to hurry Ail of our bags along And thereby relieve us of worry, So things won't all go wrong. 'Tis only a little we'er asking, And we hope you will grant us this To aid the packers and shippers And help complete our list. And so with a Avill we are working Like each and every department, And we hope you will hear through out the year Eelioes from the Foreign Department. We are liegiiining to think there will be another (Mrs.) added to the I Jisoldered I\Iesh Department if Ed- die R. of the tool room doesn't stop hanging around Violetta. The unsoldered mesh girls are won- dering wliy the editor often pa.sses tlumi by without any comment in the paper. They say if he would keep I)is eyes open he would see enough to fill the back page. Ask Blanche and liillie. And our little "inspeetress" witli her " violet" eyes can certainly find mistakes that keep Henry guess- ine whether he will put some one else on the job or rot. Who is it tliat walks on his heels ill the Planning Dept.? B. B. — to save liis soul (sole). Valentine Party The Valentine Party and Supper held by the OfS.ee, Planning, Foreign and Re]nur Departments sure was the big event of the season. The table was prettily decorated, with favors 'n everythin', and justice was done to the supper served by Mr. Olsen, even thougJi it was interrupted by the spasms of laughter caused by the ' ' Yes ' ' and. " No " game which was in progress all evening. How they did liate to part with their arrows ! Other games followed fully as interesting, and the party was complete even to the music, dancing and chorus girls. The fun lasted until a late hour, and all expressed their appreciation to the social committee, and JMr. Wliiting, who so kindly allowed the use of the restaurant. Our worthy Editor has, no doubt, received many, funny or otherwise, answers to the query in the last edi- tion of the Wadco News, why our em- ployers will risk life and limb to get to the time clock. Now if we consider similar cases in every-day life we find that it is only a natural impulse mo.st of us indulge in. It is not so much the desire to be out of the shop or ofiice, but that latent spirit of rivalry, that wishes to be first, whenever we are conscious of (he fact that someone else is trying to "get ahead" of us, that makes us act in the manner noted. In' conclusion notwithstanding: what some wiseacres might claim, it is lot so much the wish to be out of the shop that should be empliasized, l:ut the fact that after a day's work we are still so full of spirit, that we sprint up the aisle, down the stairs, challencre a friend to a game of pool or perhaps make a date wiih a lady fair. Look us oveV right and you fir.d there is a reason in mo.st everything v.-e do. P. J. S. Lil'.s motto is — "Let George do it.'" Gagnon would be very gird to kr.ow what liappered to his can of soap one night a week or two a?o. Perhaps a certain tool-maker could tell him. Everett Davis is working in the Shorbrooke factory for a few months. Chester Anderson spent a couple of weeks in Chicago at the "Fashion Show" for the Company. Dandekian was married Feb. 5, in Fitcliburg. The Mesh Department presented him with a large oak dining room table. Alfred Chabot, night foreman of the Mesh Department, was taken to the Bristol Country Sanatorium a few weeks ago. He is reported as resting comfortablv. iilrs. F. Wolle of the Joining Ma- chine Department has been taken to the ililford Ho.spital for appendici- tis. The Joining Department has moved into their new quarters. I fail to see why the editor wants an answer to the question on the front page when he has already answered it himself. AYe are ruled by our hab- its. It is a habit. — Irene Blanchard. SJie — "I dont like j'ou, Al, when you wear a red necktie." He — "Alriffht, I'll buv a gross of them." Anyone wishing to have their house cleaned apply to Byron Gardner. The Chain Company will give him a good reference. It gave Catherine Kennedy a ter- rible appetite to see "Apple Blos- soms." She had to stay in town for supper, which consisted of a dough- nut and a cup of coflFee. Dan Crotty learned something about Sloan's Liniment, as well as about hockev the other dav. Someone asked Frank ^lurphy if irs folks were well-to-do. "No, they are hard to do." rejiliod Frank. John Killian. of the Chain Com- r.iny, went to New York recently on business for the firm.